Study: More than 1/3 of Americans have debts referred for collection

We hear about the economy slowly getting better, but this is surprising and disturbing. The Urban Institute has released results of a study that shows more than 35 percent of Americans have debts and unpaid bills that have been reported to collection agencies.

"Roughly, every third person you pass on the street is going to have debt in collections," said Caroline Ratcliffe, a senior fellow at the Washington-based think tank. "It can tip employers' hiring decisions, or whether or not you get that apartment," she told the AP. The study found that 35.1 percent of people with credit records had been reported to collections for debt that averaged $5,178, based on September 2013 records. The share of Americans in collections has remained relatively constant, even as the country as a whole has reduced its credit card debt.

Health care-related bills account for 37.9 percent of the debts collected, according to the Association of Credit and Collection Professionals. Student loan debt represents another 25.2 percent and credit cards make up 10.1 percent.

The delinquent debt is overwhelmingly concentrated in Southern and Western states. Texas cities have a large share of their populations being reported to collection agencies.